Investment Q&A

Q: I am a retired senior who relies on the income generated from my non registered account, RRSP and TFSA.

My philosophy is to enjoy my money NOW ( while I am still alive!). I am confused as to how to treat ' return of capital' which form part of some companies distribution.

Does this form of income effectively lower the cost of your shares and thus increase your EVENTUAL capital gain (and tax)?. I like the idea of getting money now and paying the tax later (like when I'm dead!). I assume this is relevant only for a non registered account.

What sectors use 'return of capital' and do who have any particular stocks to recommend? Thanks

DEREK

Q: Hi Team 5i,

I have been patiently awaiting the recovery of the O&G sector. I am under water on the list of 9 stocks listed. I have been patient and have harvested dividends and DRIPed in the meantime (bank brokerage DRIPing). But with the current US admin and shift to renewable energy sources, I am concerned that the recovery may be a long time (decades ?) away. My question is ... if I chose to sell a few of the above stocks, which do you think might be the poorist performers given the current energy environment and therefore could have the longest time to recover).

Q: Just to clarify, my question below is about CUS.DB.D

Just wondering what your thoughts are on the offer to redeem the 3 Canexus debentures. As an income seeking investor, should one accept the cash offer or keep the 6.5% debentures until the end of term? Pros and cons? I was also wondering if one doesn't accept the cash offer, will there be a secondary market for these debentures? Will the convertible feature remain in place? Thanks for all your help.

Q: Hello Peter and team, MDA is taking a hit today, almost 4% drop. Are there any reasons for this? I have a full position in MDA, should I switch to something else? If yes, what would it be (in the industrial sector)? Regards, Gervais

Q: With all the activity recently involving stocks that are shorted, it got me to wondering how and why the actual process works. I believe that the shorter borrows the stock with the promise to return the stock at a future date. The shorter is hoping that the stock falls in price so that the stock can be replaced at a lower price and the shorter pockets the difference.

My questions are: who does the shorter borrow the stock from? Is it from the brokerage who holds stocks in nominee name? I can't imagine an individual wanting to lend stock to someone who is going to do their best to drive that share price down. So if it is the brokerage, do they have the unilateral right to lend the stock or do they need my permission? Do all brokerages participate in this activity? Do I (as the actual owner of the stock) get any of the money the brokerage charges for this service? Why would I want to deal with a broker who is working against me in this regard? Finally, is there a time limit at which point the stock must be returned?

Thanks for the help in understanding.

Paul F.

Q: Would you please comment on the offer to take CAM private. Sell and move on or, would you suggest something else? Also in the case of Discover Air any opinion and in particular how secure are the non secured debentures, given Clairvest holds secured ones and trying to take the company private by buying the remaining common stock for $0.20?

Thanks

Mike

Q: Could you please provide insight into the offer to go private. Based on ownership composition, it would seem unlikely a competing bid can be expected. Given the offer price and recent performance of the company it sounds like a good offer? Last check, it was trading at #12.15 so, sell or wait for the buyout date to get the $12,30 and pay no commission?

Q: Hi, Can you please comment on the recent earnings report. Would this be a good time to enter this name? thank you

Q: hi folks, could you give me an update on this stock looks like a share consolidation coming. scary or not thanks bill

Q: In your last answer on crh do you take into account the correction issued by the company regarding its first press release ?

Q: Which of these two, At current prices, would you buy today, assuming one has a balanced portfolio?

Thx
Karim

Q: Do you know if the secondary offering of PKI shares has closed? There is no confirmation on SEDAR and my broker (RBC Direct) hasn't participated in this (yet).

If it has closed, with the price holding above $29, would you consider this a good time to add?

Q: Is the drop in BNS due to negative sentiment around Home Capital? I'm trying to determine if this is another buying opportunity.

Q: Morning guys, is it a good time to buy this company for a long term holding?

Thanks.

Q: In regards to the comments of another subscriber's about HCG.

The investment thesis made perfect sense: management navigated well through 2008, the greatest financial crisis of the modern era. The company had good capitalization ratios, valuation, and track record. David Baskin, Barry Schwartz, Jason Donville, Martin Ferguson/Jeff Mo thought so, and they have great track records and returns.

Judging the outcome of one company outside of the context of the whole portfolio is not constructive. This company was also dropped from the portfolio before the crash even happened. At the end of the day, 5i has provided market beating returns EVERY year since inception with the BE portfolio. These sort of events happen in the market every now and then and we shouldn't be ignoring the gains on our big winners.

Also, should we criticize Buffet for investing in United Airlines? How was he supposed to predict the self inflicted PR nightmare that the company suddenly got themselves into. Educated estimates based on disclosed information is the best we have.

By the way, I'd rather swing for doubles and triples and average market beating returns than swing for singles with vanilla names to get the market return. No need for soul searching here.

Keep doing your thing.

Elliott

Q: I have made a lot of money by following 5i and avoided losing a heck of a lot more. No one is perfect or bats 100......
A lot of far bigger Advisory Co's got caught in this. I'm a member for life with 5i.
:)

Q: With the recent drop in price,would this be a good time to take a position for growth?

Q: Isn't it a a bit too coincidental that we learn that both Royal Bank and BMO are selling uninsured mortgage backed securities, a few days before the Home Capital death spiral? You have an optimistic bias, and typically trusting towards management, so I speculate that you will answer that there is nothing much to think of it, but could you take a distrusting view on this (without being paranoid) and guess what could have motivated them to do that?

Q: Do you see any buying opportunities in stocks that may have been unfairly impacted by HCG's news/drop? CWB and MIC have been two mentioned elsewhere.

Q: CRH down another ten percent today. Can you please comment on this after the CC. Do you still recommend holding this.